Auditor Report of Gallantt Ispat Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of GALLANTT ISPAT
LIMITED (''The Company''), which comprise the Balance Sheet as at March
31, 2014, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in sub-section
(3C) of section 211 of the Companies Act, 1956 ("the Act"). This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.

An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India, subject to Note no. 41 & 42 regarding recognition of freight
subsidy of Rs. 3076.94 lacs which is subject to decision of honorable
High Court and in case decision comes against the Co. the profit for
the year will be reduced by Rs. 3076.94 lacs.

a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014;

b) in the case of the Statement of Profit & Loss, of the Profit of the
Company for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.

Report on other legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;

b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books and proper returns adequate for the purposes of our audit have
been received from branches not visited by us;

Independent Auditors'' Report

c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account and with the returns received from branches not visited by us;

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.

Annexure to the Independent Auditor''s Report to the Shareholders
(The Annexure referred to in paragraph 1 of the Our Report of even date
to the members of Gallantt Ispat Limited on the accounts of the company
for the year ended 31st March, 2014)

On the basis of such checks as we considered appropriate and according
to the information and explanation given to us during the course of our
audit, we report that :

1. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of its

fixed assets.

(b) As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification.

(c) In our opinion and according to the information and explanations
given to us, no fixed asset has been disposed during the year and
therefore does not affect the going concern assumption.

2. (a) As explained to us, inventories have been physically verified
during the year by the management at reasonable

intervals.

(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records,
the Company is generally maintaining proper records of its inventories.
No material discrepancy was noticed on physical verification of stocks
by the management as compared to book records.

3. (a) According to the information and explanations given to us and
on the basis of our examination of the books of account,

the Company has not granted loans, secured or unsecured, to companies,
firms or other parties listed in the register maintained under Section
301 of the Companies Act, 1956.

(b) According to the information and explanations given to us and on
the basis of our examination of the books of account, the Company had
taken loan from other company covered in the register maintained under
section 301 of the Companies Act, 1956. The number of such parties is
two and the maximum mount involved during the year was Rs. 7046.58 Lacs
and year end balance is Rs. 5400.00 Lacs.

(c) The company is regular in repaying the principal amount and
interest as stipulated and no amount is overdue.

4. In our opinion and according to the information and explanations
given to us, there is generally an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventories & fixed assets and payment
for expenses & for sale of goods. During the course of our audit, no
major instance of continuing failure to correct any weaknesses in the
internal controls has been noticed.

5. According to the information and explanation provided by the
management, the transactions that need to be entered into the register
maintained U/S 301 of the Companies Act, 1956 have been so entered. In
our opinion and according to the information and explanations given to
us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public covered
under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the
Company has an internal audit system commensurate with its size and the
nature of its business.

8. As per information & explanation given by the management,
maintenance of cost records has been prescribed by the Central
Government under clause (d) of sub-section (1) of section 209 of the
Act and we are of the opinion that prima facie the prescribed accounts
and records have been made and maintained. We have not, however made a
detailed examination of the records with a view to determine whether
they are accurate and complete.

9. a) In our opinion and according to the information and explanations
given to us, Company is generally been regular in

depositing with appropriate authorities undisputed statutory dues, as
required under this clause and applicable to the Company during the
year.

b) According to the information and explanations given to us, there is
no undisputed amount payable in respect of statutory dues, outstanding
for more than six months from the date they become payable as on 31st
March, 2014.

c) Detail of dues of Value Added Tax which have not been deposited as
on 31st March 2014 on account of disputes are given below :

Statute Nature of dues Forum where Period to which the Amount
dispute is amount relates involved
Pending (Rs in Lacs)

UP VAT VAT Government of August 2011 to 3911.00
ACT 2008 Uttar Pradesh March 2014

10. The Company does not have any accumulated loss and has not
incurred cash loss during the financial year covered by our audit and
in the immediately preceding financial year.

11. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that, the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.

12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi /mutual benefit
fund/society. Therefore, the provision of this clause of the Companies
(Auditor''s Report) Order, 2003 (as amended) is not applicable to the
Company.

14. According to information and explanations given to us, the Company
is not trading in Shares, Mutual funds & other Investments.

15. According to the information and explanations given to us, the
Company has not given any guarantees for loan taken by others from a
bank or financial institution.

16. To the best of our knowledge and belief and according to the
information and explanations given to us, term loans were applied for
the purpose for which these were obtained.

17. Based on the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company as at 31st
March, 2014, we report that no funds raised on short-term basis have
been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and
explanations given to us by the management, we report that the Company
has not made any preferential allotment of shares during the year.

19. The Company has not made any allotment of debentures during the
period under audit.

20. The Company has not raised any money by public issue during the
year. However, During the year Company has, as per the terms of issue
of Zero Coupon Fully Convertible Unsecured Debentures (the "FCDs"),
converted 25,00,000 FCDs into 25,00,000 fully paid-up Equity Shares of
Rs. 10/- each.

21. Based on the audit procedures performed and the information and
explanations given to us, we report that no fraud on or by the Company
has been noticed or reported during the year, nor have we been informed
of such case by the management.

1. We have audited the accompanying financial statements of GALLANTT
ISPAT LIMITED (The Company'') which comprise the Balance Sheet as at
March 31'' 2013'' and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended'' and a summary of significant
accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position'' financial performance and cash flows of the Company
in accordance with the Accounting Standards referred to in sub-section
(3C) of section 211 of the Companies Act'' 1956 ("the Act"). This
responsibility includes the design'' implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement'' whether due to fraud or error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.

4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment'' including the
assessment of the risks of material misstatement of the financial
statements'' whether due to fraud or error. In making those risk
assessments'' the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management'' as well as evaluating the overall
presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion. Opinion

6. In our opinion and to the best of our information and according to
the explanations given to us'' the financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India: Subject to Note no. 21 & 21.1 regarding
Other Income for Relinquishing of Rights on Land'' and Note no. 43
regarding recognition of freight subsidy of Rs. 3101.11 Lacs which is
subject to decision of H''ble High Court and in case decision comes
against the Company the profit of the company will be reduced by Rs.
3101.11 Lacs

i) In case of the Balance Sheet'' of the state of affairs of the Company
as at 31st March'' 2013.

ii) In the case of Statement of Profit & Loss of'' the Profit of the
Company for the year ended on that date.

iii) In the case of the Cash Flow Statement'' of the Cash Flows for the
year ended on that date.

Report on other legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order'' 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act'' we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act'' we report that:

a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;

b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books

c) the Balance Sheet'' Statement of Profit and Loss'' and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.

d) in our opinion'' the Balance Sheet'' Statement of Profit and Loss'' and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act'' 1956;

e) on the basis of written representations received from the directors
as on March 31'' 2013'' and taken on record by the Board of Directors''
none of the directors is disqualified as on March 31'' 2013'' from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act'' 1956.

Annexure to the Independent Auditor''s Report

Referred to in paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements"

On the basis of such checks as we considered appropriate and according
to the information and explanation given to us during the course of our
audit'' we report that:

1. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.

(b) As explained to us'' fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification.

(c) In our opinion and according to the information and explanations
given to us'' no fixed asset has been disposed during the year and
therefore does not affect the going concern assumption.

2. (a) As explained to us'' inventories have been physically verified
during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations
given to us'' the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records''
the Company is generally maintaining proper records of its inventories.
No material discrepancy was noticed on physical verification of stocks
by the management as compared to book records.

3. (a) According to the information and explanations given to us and
on the basis of our examination of the books of account'' the Company
has not granted any loans'' secured or unsecured'' to companies'' firms or
other parties listed in the register maintained under Section 301 of
the Companies Act'' 1956.

(b) According to the information and explanations given to us and on
the basis of our examination of the books of account'' The Company had
taken loan from other company covered in the register maintained under
section 301 of the Companies Act'' 1956. The number of such parties is
two and the maximum amount involved during the year was Rs.6206.83 Lacs
and year end balance is Rs 3763.58.

(c) The company is regular in repaying the principal amount and
interest as stipulated and no amount is overdue.

4. In our opinion and according to the information and explanations
given to us'' there is generally an adequate internal control procedure
commensurate with the size of the company and the nature of its
business'' for the purchase of inventories & fixed assets and payment
for expenses & for sale of goods. During the course of our audit'' no
major instance of continuing failure to correct any weaknesses in the
internal controls has been noticed.

5. According to the information and explanation provided by the
management'' the transactions that need to be entered into the register
maintained U/S 301 of the Companies Act'' 1956 have been so entered. The
transaction exceeding the value of rupees five lakhs in respect of each
party have been entered during the year'' whose market price at the
relevant time of the transaction is not available before us to enable
us to comment on the reasonability of the market prices at the relevant
time.

6. The Company has not accepted any deposits from the public covered
under section 58A and 58AA of the Companies Act'' 1956. Therefore'' the
provisions of Clause (vi) of Paragraph 4 of the Order are not
applicable to the Company.

7. As per information & explanations given by the management'' the
Company has an internal audit system commensurate with its size and the
nature of its business.

8. As per information & explanation given by the management''
maintenance of cost records has been prescribed by the Central
Government under clause (d) of sub-section (1) of section 209 of the
Act and we are of the opinion that prima facie the prescribed accounts
and records have been made and maintained. We have not'' however made a
detailed examination of the records with a view to determine whether
they are accurate and complete.

9. (a) In our opinion and according to the information and
explanations given to us'' Company is generally been regular in
depositing with appropriate authorities undisputed statutory dues'' as
required under this clause and applicable to the Company during the
year.

(b) According to the information and explanations given to us'' there is
no undisputed amount payable in respect of statutory dues'' outstanding
for more than six months from the date they become payable as on 31st
March'' 2013.

(c) Details of dues of Value Added Tax which have not been deposited as
on 31st March 2013 on account of disputes are given below:

Statute Nature of
dues Forum where Period to which Amount involved
dispute is the amount (Rs. in Lacs)
Pending relates

UP VAT Act'' VAT Government
of August 2011 to 2343.14
2008 Uttar Pradesh March 2012

10. The Company does not have any accumulated loss and has not
incurred cash loss during the financial year covered by our audit and
in the immediately preceding financial year.

11. Based on our audit procedures and on the information and
explanations given by the management'' we are of the opinion that'' the
Company has not defaulted in repayment of dues to a financial
institution'' bank or debenture holders.

12. According to the information and explanations given to us'' the
Company has not granted loans and advances on the basis of security by
way of pledge of shares'' debentures and other securities.

13. The Company is not a chit fund or a nidhi /mutual benefit
fund/society. Therefore'' the provision of this clause of the Companies
(Auditor''s Report) Order'' 2003 (as amended) is not applicable to the
Company.

14. According to information and explanations given to us'' the Company
is not trading in Shares'' Mutual funds & other Investments.

15. According to the information and explanations given to us'' the
Company has not given any guarantees for loan taken by others from a
bank or financial institution.

16. To the best of our knowledge and belief and according to the
information and explanations given to us'' term loans were applied for
the purpose for which these were obtained.

17. Based on the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company as at 31st
March'' 2013'' we report that no funds raised on short-term basis have
been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and
explanations given to us by the management'' we report that the Company
has not made any preferential allotment of shares during the year.

19. The Company has has not made any allotment of debentures during
the period under audit.

20. The Company has not raised any money by public issue during the
year.

21. Based on the audit procedures performed and the information and
explanations given to us'' we report that no fraud on or by the Company
has been noticed or reported during the year'' nor have we been informed
of such case by the management.

For Anoop Agarwal & Co.

Chartered Accountants

(Registration No. 01739C)

(H.C Pant)

Place :Kolkata Partner

Dated: May 25'' 2013 Membership No. 17694

Mar 31, 2012

1. We have audited the attached Balance Sheet of GALLANTT ISPAT
LIMITED as at 31st March, 2011, the Statement of Profit & Loss and also
the Cash Flow Statement for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
Company's Management. Our responsibility is to express an opinion on
these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of section 227(4A) of the
Companies Act, 1956, we annex hereto a statement on the matters
specified in paragraphs 4 and 5 of the said order.

4. Further to our comment in the annexure referred to in Paragraph 3
above, we report that:

a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for my audit.

b. In our opinion, proper books of account as required by law have
been kept by the Company, so far as appears from our examination of the
books.

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
Accounts.

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and
the Cash Flow Statement dealt by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.

e. On the basis of written representations received from directors and
taken on record by the Board of Directors, we report that none of the
director is disqualified from being appointed as a director under
clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956
as on 31st March, 2012.

f. We draw attention to note no. 24 & 24.2 regarding other Income from
commission and profit on sale of rights on land.

g. In our opinion and to the best of our knowledge and according to
the explanation given to us, the said accounts read together with notes
thereon give the information required by the Companies Act, 1956 in the
manner as required, and give a true and fair view in conformity with
the accounting principles generally accepted in India :

i) In case of the Balance Sheet, of the state of affairs of the Company
as at 31st March, 2012.

ii) In the case of Statement of Profit & Loss, of the Profit of the
Company for the year ended on that date.

iii) In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date

Annual Report 2011-2012 21

(Referred to in paragraph 3 of our report of even date)

i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.

b) Fixed assets have been physically verified by the Management.
According to the information and explanation given to us, no material
discrepancies were noticed on such verification.

c) No fixed assets have been disposed during the year.

ii) a) The inventory has been physically verified during the year by
the Management. In our opinion, the frequency of verification is
reasonable.

b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.

c) The Company has maintained proper records of its inventories. No
material discrepancies were noticed on physical verification.

iii) a) The Company had taken loan from other company covered in the
register maintained under section 301 of the Companies Act, 1956. The
number of such parties is three and the maximum amount involved during
the year was Rs. 2025.28 lacs and year and balance is Nil. The company
has granted loans, secured or unsecured to Companies, firms or other
parties, covered in the register maintained under section 301 of the
Act. The number of such party is one and the maximum amount involved
during the year was Rs. 185.00 Lacs and year end balance is Nil.

b) In our opinion, the rate of interest and other terms and conditions
on which loan has been taken and granted from company listed in the
register maintained under section 301 of the Companies Act, 1956 are
not, prima facie prejudicial to the interest of the company.

c) The company is regular in repaying the principal amount and interest
as stipulated and no amount is overdue.

iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and nature of its business, for the
purchase of inventories, fixed asset and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness in internal control system.

v) According to the information and explanation provided by the
management, the transactions that need to be entered into the register
maintained U/S 301 of the Companies Act, 1956 have been so entered. The
transaction exceeding the value of rupees five lakhs in respect of each
party have been entered during the year, whose market price at the
relevant time of the transaction is not available before us to enable
us to comment on the reasonability of the market prices at the relevant
time.

vi) The Company has not accepted any deposit from the public as
stipulated under the Provisions of section 58A and 58AA of the
Companies Act, 1956.

vii) The Company has an internal audit system which, in our opinion, is
commensurate with the size and nature of its business.

viii) The Central Government has prescribed the maintenance of cost
records under section 209(1)(d) of the Companies Act, 1956.

ix) a) In our opinion and according to the information and explanations
given to us, Company is generally been regular in depositing with
appropriate authorities undisputed statutory dues, as required under
this clause and applicable to the Company during the year.

b) According to the information and explanations given to us, there is
no undisputed amount payable in respect of statutory dues, outstanding
for more than six months from the date they become payable as on 31st
March, 2012.

c) Details of dues of Value Added Tax which have not been deposited as
on 31st March, 2012 on account of disputes are given below:

Statute Nature of dues Forum where Period to which Amount in
volved
dispute is the amount (Rs. in Lakh)
Pending relates

UPVAT
Act, VAT Government
of August 2011 to 953.96
2008 Uttar
Pradesh March 2012

x) The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.

xi) Based on our audit procedure and on the basis of information and
explanations given by the management, the Company has not defaulted in
repayment of dues to financial institutions or banks.

xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit fund or nidhi/mutual benefit
fund/society, therefore clause 4(xiii) of the order is not applicable
to the Company.

xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures, other investments and contracts.

xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions.

xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, term loans were applied for
the purpose for which these were obtained.

xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, no funds
raised on short term basis have been used for long term investment.

xviii) The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under seciton
301 of the Companies Act 1956.

xix) During the year the company has allotted 2500000,0% Fully
Convertible Debentures of Rs. 10 each at a premium of Rs. 150.00 each.

xx) During the Year the company has not raise any money by way of
public issue.

xxi) In our opinion and according to information and explanations given
to us, no fraud on or by the Company has been noticed or reported
during the course of our audit.

For Anoop Agarwal & Co.

Chartered Accountants

(Registration No. 01739C)

(H.C.Pant)

Place : Kolkata Partner

Dated : August 13, 2012 Membership No. 17694

Mar 31, 2011

1. We have audited the attached Balance Sheet of GALLANTT ISPAT
LIMITED as at 31st March, 2011, the Profit & Loss Account and also the
Cash Flow Statement for the year ended on that date, annexed thereto.
These financial statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of section 227(4A) of the
Companies Act, 1956, we annex hereto a statement on the matters
specified in paragraphs 4 and 5 of the said order.

4. Further to our comment in the annexure referred to in Paragraph 3
above, we report that:

a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for my audit.

b. In our opinion, proper books of account as required by law have
been kept by the Company, so far as appears from our examination of the
books.

c. The Balance Sheet, Profit and Loss account and Cash Flow Statement
dealt with by this report are in agreement with the books of Accounts.

d. In our opinion, the Balance Sheet, Profit and Loss account and the
Cash Flow Statement dealt by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.

e. On the basis of written representations received from directors and
taken on record by the Board of Directors, we report that none of the
director is disqualified from being appointed as a director under
clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956
as on 31st March, 2011.

f. In our opinion and to the best of our knowledge and according to
the explanation given to us, the said accounts read together with notes
thereon give the information required by the Companies Act, 1956 in the
manner as required, and give a true and fair view in conformity with
the accounting principles generally accepted in India :

i) In case of the Balance Sheet, of the state of affairs of the Company
as at 31st March, 2011.

ii) In the case of Profit & Loss Account, of the Profit of the Company
for the year ended on that date.

iii) In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date

Annexure to the Auditor's Report
(Referred to in paragraph 3 of our report of even date)

i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.

b) Fixed assets have been physically verified by the Management.
According to the information and explanation given to us, no material
discrepancies were noticed on such verification.

c) No fixed assets have been disposed during the year.

ii) a) The inventory has been physically verified during the year by
the Management. In our opinion, the frequency of verification is
reasonable.

b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.

c) The Company has maintained proper records of its inventories. No
material discrepancies were noticed on physical verification.

iii) a) The Company had taken loan from other company covered in the
register maintained under section 301 of the Companies Act, 1956. The
number of such parties is three and the maximum amount involved during
the year was Rs.5840.11 Lacs and year end balance is Rs.1741.82 Lacs.
The company has granted loans, secured or unsecured to Companies, firms
or other parties, covered in the register maintained under section 301
of the Act. The number of such party is one and the maximum amount
involved during the year was Rs.150.00 Lacs and year end balance is Rs
150.00 Lacs.

b) In our opinion, the rate of interest and other terms and conditions
on which loan has been taken and granted from company listed in the
register maintained under section 301 of the Companies Act, 1956 are
not, prima facie prejudicial to the interest of the company.

c) The company is regular in repaying the principal amount and interest
as stipulated and no amount is overdue.

iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and nature of its business, for the
purchase of inventories, fixed asset and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness in internal control system.

v) According to the information and explanation provided by the
management, the transactions that need to be entered into the register
maintained U/S 301 of the Companies Act, 1956 have been so entered. The
transaction exceeding the value of rupees five lakhs in respect of each
party have been entered during the year, whose market price at the
relevant time of the transaction is not available before us to enable
us to comment on the reasonability of the market prices at the relevant
time.

vi) The Company has not accepted any deposit from the public as
stipulated under the Provisions of section 58A and 58AA of the
Companies Act, 1956.

vii) The Company has an internal audit system which, in our opinion, is
commensurate with the size and nature of its business.

viii) The Central Government has prescribed the maintenance of cost
records under section 209(l)(d) of the Companies Act, 1956.

ix) a) In our opinion and according to the information and explanations
given to us, Company is generally been regular in depositing with
appropriate authorities undisputed statutory dues, as required under
this clause and applicable to the Company during the year.

b) According to the information and explanations given to us, there is
no undisputed amount payable in respect of statutory dues, outstanding
for more than six months from the date they become payable as on 31st
March, 2011.

c) According to the information and explanations given to us, there are
no statutory dues that have not been deposited with the appropriate
authorities on account of any dispute.

x) The Company has accumulated losses of Rs. 302.13 Lacs at the end of
the financial year but has not incurred any cash losses during the
financial year covered by our audit.

xi) Based on our audit procedure and on the basis of information and
explanations given by the management, the Company has not defaulted in
repayment of dues to financial institutions or banks.

xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit fund or nidhi/mutual benefit
fund/society, therefore clause 4(xiii) of the order is not applicable
to the Company.

xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures, other investments and contracts.

xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions.

xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, term loans were applied for
the purpose for which these were obtained.

xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, no funds
raised on short term basis have been used for long term investment.

xviii) The Company has not made any preferential allotment of shares
during the year.

xix) The Company has not issued any debentures during the year.

xx) During the year the Company has raised funds throught public issue.
The end use of funds has been disclosed in Note No. 8 of the "Notes of
Accounts" forming part of the financial statements. The end use of
money raised by Public issue has been verified by us.

xxi) In our opinion and according to information and explanations given
to us, no fraud on or by the Company has been noticed or reported
during the course of our audit.

For Anoop Agarwal & Co.

Chartered Accountants

(Registration No. 01739C)

(H.C Pant)

Partner

Dated: May 28, 2011 Membership No. 17694

Mar 31, 2009

1. We have audited the attached Balance Sheet of GALLANTT ISPAT
LIMITED as at 31stMarch, 2009, the Profit & Loss Account and also
the Cash Flow Statement for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
Companys Management. Our responsibility is to express an opinion
on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of section 227(4A) of the
Companies Act, 1956, we annex hereto a statement on the matters
specified in paragraphs 4 and 5 of the said order.

4. Further to our comment in the annexure referred to in Paragraph 3
above, we report that:-

a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for my audit.

b. In our opinion, proper books of account as required by law have
been kept by the Company, so far as appears from our examination of the
books.

c. The Balance Sheet, Profit and Loss account and Cash Flow Statement
dealt with by this report are in agreement with the books of Accounts.

d. In our opinion, the Balance Sheet, Profit and Loss account and the
Cash Flow Statement dealt by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.

e. On the basis of written representations received from directors and
taken on record by the Board of Directors, we report that none of the
director is disqualified from being appointed as a director under
clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956
as on 31st March, 2009.

f. In our opinion and to the best of our knowledge and according to
the explanation given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner as required, and
give a true and fair view in conformity with the accounting principles
generally accepted in India:

i) In case of the Balance Sheet, of the state of affairs of the Company
as at 31st March, 2009.

ii) In the case of Profit & Loss Account, of the profit of the Company
for the year ended on that date.

iii) In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our
report of even date)

i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.

b) Fixed assets have been physically verified by the Management.
According to the information and explanation given to us, no material
discrepancies were noticed on such verification.

c) No fixed assets have been disposed during the year.

ii) a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.

b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.

c) The Company has maintained proper records of its inventories. No
material discrepancies were noticed on physical verification.

iii) a) The Company had taken loan from other company covered in the
register maintained under section 301 of the Companies Act, 1956. The
number of such party is one and the maximum amount involved during the
year was Rs. 1273.00 Lacs and year end balance is Rs.Nil. The company
has granted loans, secured or unsecured to Companies, firms or other
parties, covered in the register maintained under section 301 of the
Act. The number of such party is one and the maximum amount involved
during the year was Rs.700.00 Lacs and year end balance is Rs.Nil

b) In our opinion, the rate of interest and other terms and conditions
on which loan has been taken and granted from company listed in the
register maintained under section 301 of the Companies Act, 1956 are
not, prima facie prejudicial to the interest of the company.

c) The company is regular in repaying the principal amount and interest
as stipulated and no amount is overdue.

iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and nature of its business, for the
purchase of inventories, fixed asset and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness in internal control system.

v) According to the information and explanation provided by the
management, the transactions that need to be entered into the register
maintained U/S 301 of the Companies Act, 1956 have been so entered. The
transaction exceeding the value of rupees five lakhs in respect of each
party have been entered during the year, whose market price at the
relevant time of the transaction is not available before us to
enable us to comment on the reasonability of the market prices at the
relevant time.

vi) The Company has not accepted any deposit from the public as
stipulated under the Provisions of section 58A and 58 AA of the
Companies Act, 1956.

vii) The Company has an internal audit system which, in our opinion, is
commensurate with the size and nature of its business.

viii) The Central Government has prescribed the maintenance of cost
records under section 209(l)(d) of the Companies Act, 1956. However
since the Company is under pre-operational stage of Steel Plant,
maintenance of cost records is not applicable during the year, to the
Company.

ix) a) In our opinion and according to the information and explanations
given to us, Company is generally been regular in depositing with
appropriate authorities undisputed statutory dues, as required under
this clause and applicable to the Company during the year.

b) According to the information and explanations given to us, there is
no undisputed amount payable in respect of statutory dues, outstanding
for more than six months from the date they become payable as on 31st
March, 2009.

c) According to the information and explanations given to us, there are
no statutory dues that have not been deposited with the appropriate
authorities on account of any dispute.

x) The Company does not have any accumulated losses at the end of the
financial year and has not incurred any cash losses during the
financial year covered by our audit and since this is first year of the
companys commercial operation comment on the immediately preceding
financial year is not applicable.

xi) Based on our audit procedure and on the basis of information and
explanations given by the management, the Company has not defaulted in
repayment of dues to financial institutions or banks.

xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit fund or nidhi/mutual benefit
fund/society, therefore clause 4(xiii) of the order is not applicable
to the Company.

xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures, other investments and contracts.

xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions.

xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, term loans were applied for
the purpose for which these were obtained.

xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, no funds
raised on short term basis have been used for long term investment.

xviii) The Company has not made any preferential allotment of shares
during the year.

xix) The Company has not issued any debentures during the year.

xx) During the year the Company has not raised any money by way of
public issue. Hence clause (xx) of Para 4 of the order is not
applicable.

xxi). In our opinion and according to information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the course of our audit.